ABM Industries Inc. (NYSE:ABM) reported fiscal first-quarter results Tuesday that topped revenue expectations but missed profit estimates.
Revenue totaled $2.244 billion, up 6.1% year over year and above the $2.193 billion analyst estimate. Adjusted EPS was 83 cents, missing the 87 cents consensus estimate.
Net income was $38.8 million, or 64 cents per diluted share, compared with $43.6 million. Adjusted EBITDA totaled $117.8 million, compared with $120.6 million last year.
Segment Performance
Revenue growth was broad-based across the portfolio. Technical Solutions revenue rose 13.6% to $229.7 million, supported by demand for mission-critical and datacenter-related services.
Aviation revenue increased 10.2% to $297.7 million, reflecting healthy air travel trends and new contract ramps.
Business & Industry revenue grew 4.1% to $1.065 billion, supported by growth in the U.K. and stable U.S. prime office markets.
Manufacturing & Distribution revenue increased 7.1% to $422.3 million, driven by client wins and contract expansions.
Education revenue rose 1.5% to $228.7 million, benefiting from strong client retention.
Segment operating margin was 7.1%, down from 7.6% a year earlier. The decline reflected unfavorable project timing and a service mix in Technical Solutions, as well as margin impacts from newer contracts.
Cash Flow And Outlook
Operating cash flow totaled $62.0 million, and free cash flow was $48.9 million. In the prior-year period, operating cash flow usage was $106.2 million, and free cash flow was negative $122.9 million.
ABM ended the quarter with $100.4 million in cash and cash equivalents and total indebtedness of $1.7 billion. The company repurchased approximately 2.1 million shares for $91.1 million at an average price of $44.13 per share.
“ABM is off to a solid start to fiscal 2026, delivering strong organic revenue growth of 5.5% and meaningful improvement in operating cash flow and free cash flow,” said Scott Salmirs, President and Chief Executive Officer.
“From a margin perspective, results were below our expectations, driven primarily by Technical Solutions, which, as we’ve noted in the past, is inherently project-driven and can vary quarter to quarter,” he added.
“While we remain encouraged by constructive demand trends across our end markets, we continue to approach the broader macroeconomic environment with discipline. Our fiscal 2026 outlook remains unchanged. We expect margin performance to improve as project timing in ATS normalizes and as we continue executing on operational and cost initiatives across the enterprise,” concluded Salmirs.
Reaffirms Outlook
ABM affirmed its fiscal 2026 outlook, expecting organic revenue growth of 3% to 4% and total revenue growth of 4% to 5%.
The company continues to project adjusted EPS of $3.85 to $4.15, compared with the $3.99 analyst estimate.
Segment operating margin is expected to range from 7.8% to 8.0%, with interest expense forecast between $95 million and $105 million and a normalized tax rate of 29% to 30%.
ABM Price Action: ABM shares were down 7.88% at $39.86 at the time of publication on Tuesday. The stock is trading at a new 52-week low, according to Benzinga Pro data.
Image via Shutterstock
This article ABM Industries Stock Sinks To 52-Week Low - Here's Why originally appeared on Benzinga.com
.
